Vietnam Tour Operators lose out on Dollar rise

2010-09-06 (GMT + 7)

VietnamTour Operators who had signed big contracts with foreign partners have lost big money because of the devaluation of the Vietnam dong against the U.S. dollar.

Luu Dinh Phuc of Viettours said local people are still purchasing outbound tours as normal but the company, in the short term, has incurred a big loss from its contracts signed before August 18. Big groups normally paid 45-60 days after the invoice are issued so the dong devaluation from VND19,400 to VND19,154 per dollar meant losses especially for contracts worth hundreds of thousands of dollars, he also said. Vietnam tour Operators are also worried about the high price of the dollar on the black market as commercial banks often refuse to sell dollars when the currency is in short supply, forcing outbound tour operators to buy dollars on the free market. “The price on the unofficial market is higher than the price at the banks but we need to buy dollars for overseas payments” said Dinh Kim Phuong, director of Carnival Tours. Vietnam has seen rapid growth in outbound tour activities in recent years thanks to improvement of local people’s living standards. In 2006, Vietnam travel industry served 17 million domestic tourists, including 400,000 clients who registered for outbound tours. On average, a Vietnamese traveler spends $200 during a trip to an Asian country and $500 during a trip to a European country (not including tour fees).